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The 2020 Hospitality and Tourism Trends That Will Likely Stay in 2021 and Beyond

Looking back before we look forward

At year-end 2019, I predicted a few 2020 trends in hospitality, retail, and tourism businesses. For example, I recommended that we should pay special attention to the following areas:

  • A shifting focus on food delivery, sustainable food, and quick-casual restaurants.
  • Using AI and facial recognition in service operations.
  • The threats from Google, Amazon, and Airbnb as a (potential, new) giant tourism enterprise in the market.
  • Investors’ growing interest in boutique retail stores and hotels.
  • Customer loyalty issues as more travel companies adopted the dynamic pricing strategy even in their frequent traveler programs.
  • Safety issues during travel.

Certainly, the global pandemic was not anything I could predict back in 2019, but COVID-19 might have just accelerated many of the foreseeable changes we expected for the future. Moreover, many of the changes we observed in 2020 will very likely stay in 2021 and beyond, including

Delivery and contactless self-service will continue to grow

Delivery service in restaurants and supermarkets, among other sectors, had observed a boost since the pandemic hit in March. Additionally, restaurants, hotels, and airlines have extended or rolled out contactless self-service through mobile apps, kiosks, and facial recognition technology.

A large number of fast-food chains also introduced new restaurant designs that embrace such trends, including double- or triple-drive-thru lanes, conveyor belt delivery, and food lockers for pick-up orders. In some cases, dining rooms become optional, where the restaurants only focus on delivery and pick-up services.

Meanwhile, Amazon began testing Amazon One, a new biometric payment device that relies on cloud and palm recognition technologies. Palm recognition might become a popular biometric tool in the future as it has some advantages over those more commonly used facial or fingerprint recognition technologies.

Home-sharing will remain a large share of the lodging industry

When the pandemic hit, I wondered if home-sharing guests would choose to stay in chain hotels instead due to hotels’ enhanced cleaning standards. It turned out that home-sharing and luxury hotels might recover sooner than other lodging products. Furthermore, Airbnb is ready for IPO in mid-December, targeting $30 to $33 billion.

As we discovered more about home-sharing services through research, such as their 7 P’s marketing mix, consumer preferences of sharing or accessing the accommodation facilities, and Airbnb listings’ agglomeration effect, some hotel chains had already gotten into the home-sharing business. Like Airbnb, hotels’ home-sharing arms are doing well even during the pandemic, which may encourage more hotel chains to enter the home-sharing market.

If COVID-19 becomes a catalyst for more hotel mergers and acquisitions, will more hotels get into the home-sharing market through acquisitions? Or the other way around, will Airbnb acquire a hotel chain or another OTA (online travel agent) site?

Work from home will stay but is not helping business travel

Many companies cut the budget for business travel, and an increasing number of organizations let employees work from home permanently. When fewer people commute or travel for work, the work-from-home trend does not help the hospitality and tourism industry but may stimulate extended-stay hotel growth.

When will travel recovery take place?

Some people believe that COVID-19 will forever change the way people travel. While indicators showed travel and hospitality businesses were picking up in the summer, largely from leisure travelers, nobody can precisely predict what the future holds. Until we can travel again, or more importantly, until people travel for business again, we will not see a real recovery. Right now, it is not a bad idea to target baby boomers for leisure demand.

Other trends

Facebook is losing its charm to certain internet user groups. It becomes critical for us to know where our prospects hang out after they abandon Facebook.

Following the breakthrough results of the COVID-19 vaccines, it is safe to predict coronavirus restrictions will be lifted soon. I hope we will resume our normal routines shortly. Still, it will take a while before we can ease our cautionary measures against the virus.

Source:  Linchi Kwok, Associate Professor at The Collins College of Hospitality Management | Hospitality Net

https://www.hospitalitynet.org/opinion/4101917.html

New Insights Into How Guests Are Using Airbnb for Longer-Term Stays

Six months ago, we shared how Airbnb and the Airbnb community adapted to meet new consumer needs for longer-term stays as people are seeking to ‘live anywhere.’ From working parents needing space to support their kids with at-home schooling and medical providers needing places to stay near the front lines, to college students booking “collab houses” for remote learning and digital nomads, we’re seeing interesting trends with these types of stays.

Here are key findings from booking data and a global survey we conducted at the end of October 2020 with guests who booked longer-term stays* with Airbnb in the last three months.

Responding to the global pandemic

Based on our survey, COVID was a factor in 54 percent of longer-term stays booked on Airbnb in the last three months. Not surprisingly, longer-term guests are traveling for different reasons than they were pre-COVID. For example, more guests are relocating during COVID than they were pre-COVID (18% vs. 10% pre-COVID).

Guests told us longer-term stays enabled them to escape their daily routines, be closer to loved ones, nature, or outdoor activities, enjoy access to different amenities (like a pool!), have more space, or save money staying somewhere with a lower cost of living.

Staying connected to loved ones and communities

  • Nearly 40% of longer-term stays were booked for one person.
  • Nearly 40% of longer-term stays included two people. Survey respondents shared that the additional person in their booking was most often a significant other.
  • A little more than 20% of longer-term stays were booked for three or more people, with guests most frequently telling us their trips included a significant other and child[ren].

And, most travelers had connections to their destinations:

  • 46% of longer-term trips were taken to places guests visited three or more times in the past, have lived before, or currently live.
  • 54% of guests knew at least one acquaintance in their destination, and often they had friends (26%) or family (24%) there as well.
  • For trips taken within 0-50 miles of home, 78% of guests knew someone in their destination; for trips taken within 300+ miles of home, 63% of guests knew someone in their destination.

Remote work and remote learning

Using Airbnb to live, work, or learn in different locations came in as the top reason for recent longer-term stays:

  • 60% of longer-term guests were working or studying during their stays.
  • 65% of guests working or studying remotely during their stay reported that COVID was a factor in their decision to book a longer-term stay. Most often they reported feeling newfound freedom to temporarily relocate while not commuting to offices or schools.

Amenities and features: high-speed internet is a must-have for all

It’s no surprise that longer trips require different amenities than shorter trips. All longer-term stay travelers rated high-speed internet as their top priority, with proximity to frequent destinations (e.g., nearby family) coming in at number two. When we drilled down into trip types:

  • Leisure travelers looked at proximity to points of interest (e.g., national parks).
  • Remote workers prioritized listings with comfortable workspaces.
  • Large groups leaned toward family-friendly listings.
  • Retirees sought neighborhood walkability.

Guests also told us they chose Airbnb over other platforms because Airbnb made it easy to search for and find the places they were looking for.

Source: https://www.hospitalitynet.org/news/4101534.html

Building Total Hotel Guest Revenue for a Profitable Future Through Seamless Self-Serve Capabilities

There have been and still are many necessary changes to hotel operations to specifically address the need for viral safety in the wake of COVID-19. But a better outlook would be to think long-term and understand that much of the shift over the past two quarters would have come about anyway, with the pandemic only markedly catalyzing the urgency for an evolution to the hospitality industry.

Ostensibly, the most profound way hoteliers and property owners can build a profitable hotel in the next normal – and for the next next normal once we are in the clear from crisis – is to abandon a siloed room revenues model, as most identified by metrics like RevPAR and, to a lesser extent, GOPPAR (gross operating profit per available room). With a multitude of factors hindering full occupancies and consistent ADR growth over the next couple years, we instead must look to how we can capture the most revenue per available guest (RevPAG) or total revenue per available guest (TRevPAR) through the proficient convergence of guestrooms, F&B, spa, parking, golf, activities, gift shop and any other chargeable amenity. (To reduce confusion, let’s stick with the RevPAG acronym from here out.)

In today’s hospitality landscape, though, the only realistic way to achieve this goal of generating more ancillary capture is through the deployment of integrated technologies so that the purchase of these amenities is made as easy and as frictionless as possible, all without burdening a hotel’s already overworked teams.

As background research for this central industry development, we sat down with Frank Pitsikalis, Founder and CEO of ResortSuite, a PMS provider based out of our hometown of Toronto, where he added, “What we’ve keenly observed through discussions with our clients is that the post-pandemic traveler wants a high touch hotel experience but without any physical touchpoints. They value privacy above all else, where every service must be available in seamless self-serve manner, both prearrival within the booking engine and via the website or a branded app once guests are onsite.”

Indeed, hotels have already addressed the new demand for this ‘seamless self-serve’ with guest messaging apps, self-check-in or check-out, mobile room keys and a myriad of other software integrations. While these features are essential for safe operations, most aren’t prompting or encouraging guests to spend more. Hence, once the more immediate concerns for Covid are resolved, hoteliers must find ways to optimize revenues from the currently limited pool of customers.

When reviewing what hotels can do in this regard with Pitsikalis, first to mind is having the ability to guide guests through a series of amenities that will enhance their experience right from the room reservation window. From the ResortSuite properties that we demoed together, the most common ways to boost RevPAG were for dining and spa appointment as well as in-room arrival amenities.

One specific resort example highlighted which uses the PMS, the Watergate Bay Hotel near Cornwall in the United Kingdom, has experienced a sizeable increase in online dining and activity reservations since marrying these options to the website’s booking engine. Significantly, with physical distancing measures in place, such prearrival prompting has worked to ensure that hotel guests always have a spot at one of the hotel’s two restaurants without a reservationist or restaurant supervisor having to reach out individually in the week prior. This is due to the reduced capacity allowances whereby walk-ins from locals may swoop in to claim all available seats at the popular eateries, leaving hotel guests without reservations to fend for themselves – and reflecting poorly on the incumbent property.

Whereas before there was some rigidity to properly integrating these points of sale directly with the PMS, the Covid crisis has brought to light a pressing need for holistic integrations like this. Making it easy for guests to book additional services in a contactless manner will not only heighten total revenues and give you deeper data from which to refine your future marketing approach, but it will also help rein in staff costs because manual transfer between disconnected systems is no longer necessary and more prearrival service arrangements will let you better forecast upcoming labor requirements.

As an essential caveat at this juncture, such tech upgrades designed to enhance RevPAG should in no way detract from a hotel’s continued commitment to proper sanitization and cleanliness. Rather, our hypothesis is that these safety promises have rapidly become guest expectations and will not act as core drivers for room bookings. Guest privacy and the ability to deliver a host of services via touchless software portals will in fact work to boost occupancy and overall customer satisfaction.

That is, there is a critical and often understated relationship between post-departure guest survey results and service utilization. The general trendline herein is that the more a visitor uses a hotel’s amenities, the more they will enjoy their stay. With this in mind, getting guests to eat at your restaurant, complete a spa treatment or sign up for a half-day activity will halo positively back onto the core product – the hotel’s rooms – in the form of improved online reviews, word of mouth and return visits.

Given all these clear advantages, prioritizing a RevPAG viewpoint is rapidly becoming a critical step for the future of hotel operations. This is especially apparent for the near-term where leisure guests are a dominant force and groups are slow to recover, but it also holds true for the entire decade ahead in that guests are increasingly digital-fluent and want all services to be straightforwardly accessible in a self-serve format.

My hope is that by explaining how important it is to now connect everything online, you’ll use the months ahead to map out what technologies you need to make it easier for guests to purchase your services. Only then can you maximize total revenue and develop a healthier approach to operating in any travel marketplace.

Source: https://hoteltechnologynews.com/2020/10/building-total-hotel-guest-revenue-for-a-profitable-future-through-seamless-self-serve-capabilities/

Carnival Sensation Rescues 24 People Off Florida Coast

Carnival Cruise Line’s ship the Sensation might be in a pause like the rest of the industry, but it was able to fire up the engines and make a dramatic rescue this morning.

The Sensation came to the aid of a small craft in distress in international waters 37 miles off the coast of Palm Beach, Fla., saving 24 people including two children.

The boat had begun taking on water. Upon seeing the craft in the water, Carnival Sensation maneuvered alongside the smaller boat and provided blankets, life jackets, food and water to the people on board, which included individuals from various nationalities.

Carnival spokesman Vance Gulliksen said, “Some ships like the Sensation have been docked in international waters In the Atlantic and Caribbean (seas) during the pause. Some others were repatriating crew members all over the world and then return to join the other ships.”

All 24 individuals saved from the sinking boat were evaluated by Carnival Sensation’s medical team and were quarantined away from crew members.

All appropriate authorities, including the United States Coast Guard (USCG), were notified, and the USCG dispatched a cutter to the scene to retrieve the 24 individuals from the Sensation. There were only limited crew members aboard the Carnival ship and no guests.

Source: https://www.travelpulse.com/news/cruise/carnival-sensation-rescues-24-people-off-florida-coast.html

Expo 2020 kicks off thematic programming with virtual Space Week

A virtual event bringing together some of the brightest stars in space travel and exploration will probe the benefits, solutions and challenges of exploring beyond our planet as part of preparations for Expo 2020 in Dubai.

The event will include an appearance from Sarah Al Amiri, United Arab Emirates minister of state for advanced technology and science lead for the Emirates Mars Mission.

Open to the public and hosted by Expo 2020 today and tomorrow, during World Space Week, the virtual event will also feature James Green, chief scientist at the National Aeronautics and Space Administration (NASA).

It underlines a commitment to bring together the most ambitious minds, across ten thematic weeks, to address some of the greatest challenges facing the planet.

Reem Al Hashimy, director general of Expo 2020 Dubai Bureau, said: “Our theme weeks will draw on Expo 2020’s central role in bringing together the world’s brightest, most inquisitive and innovative minds from more than 190 participating nations, to participate in the sharing of knowledge, new ideas and innovations that will stand the test of time.

“Space, as a resource shared by all humanity, is one of these crucial topics.

“With the technological advancement of space travel and exploration making the dream of space tourism closer to a reality than ever before, managing it peacefully and equitably requires the concerted international cooperation of all space-faring nations.” 

The event will highlight the latest innovations in space research and travel, while also providing a platform to discuss focus areas including space exploration, governance and law, space data and remote sensing, and the space landscape.

Source: https://www.breakingtravelnews.com/news/article/expo-2020-kicks-off-thematic-programming-with-virtual-space-week/

USD 810B worth of projects to help Saudi leisure tourism sector grow to new heights in the next 10 years

Massive investment in mega tourism projects to the tune of USD 810B is expected to transform Saudi Arabia to one of the largest leisure tourism industries in the world between now and 2030, according to research conducted by the Middle East and North Africa Leisure Attractions Council (MENALAC), the leisure and entertainment industry council representing the Middle East’s dynamic leisure attractions sector.

“Mega tourism projects being developed by the Public Investment Fund will be spread over an area of more than 64,634 square kilometers, with a value exceeding $810 billion,” according to Saudi Commission for Tourism and National Heritage (SCTH), the country’s tourism regulator.

Among these, the USD 500B Neom leads the list of the mega projects – which once completed, will deliver a futuristic mega sustainable city, followed by the USD 10B Qiddiyah Project, spread across 334 square kilometres in Riyadh. 

The third project is Amaala, or the Saudi Riviera, located in the northern region with an area of 3,800 square kilometres, and developing islands in the Red Sea with a total area of 34,000 square kilometres. 

Mishal Al Hokair, Board Member of MENALAC, said, “Saudi Arabia has an array of dynamic plans and attractions planned over the next few years, each of which will add to the fast growing Leisure and Entertainment sector. Its Vision 2030 will change the entire economic and tourism landscape of not only Saudi Arabia, but the entire Middle East region, which will have a massive positive knock-on effect on the leisure tourism industry.

“Once the current Covid-19 situation improves, the investment and development in the Saudi Arabia’s tourism sector will bring massive opportunities for the industry. It is time for everyone to prepare for the next big growth.”

In addition, SCTH will be developing museums in various Saudi regions, and preserving Saudi heritage with a cost of more than USD 1.3B. 

“Saudi Arabia foresees that national tourism will significantly contribute to the gross domestic product as the most growing non-oil economic sector.  The tourism revenues increased to more than USD 51B in 2017, and to more than USD 56B in 2018,” SCTH said in a report.

The total number of inbound and outbound tourist trips in Saudi Arabia is expected to reach 62 million trips, where tourism revenues are anticipated to exceed USD 37B by the end of 2020.  

“Therefore, it is anticipated to rank as the 24th on the scale of tourist business environment, and 124th in the international openness of tourism, and the 60th in the travel and tourism competitiveness indicator,” the report said.

Also, tourist facilities licensed by SCTH, have achieved a big growth over the past 10 years, especially in tourist accommodation.  In 2008, the number of tourist accommodations did not exceed 800 hotels, and hotel apartments.  In 2018 the number increased to 7,388.  The number of travel and tourism agencies went up from 589 to 2,414, with the presence of 633 tourist trips organisers.

Changes and growth in Saudi Arabia’s tourism landscape will help leisure attractions operators in the Middle East and North African countries. The recent reopening of the land borders by Saudi Authorities will help boost regional tourism in the GCC region.

SCTH plans to facilitate investment of SR171.05 billion that will boost the tourism industry capacity and the number of hotel rooms to 621,600 rooms and boost the tourism sector’s contribution to the GDP by 3.1 percent, and increase direct employment to 1.2 million jobs.

Prakash Vivekanand, Board Member of MENALAC, said, “The latest news from Saudi Arabia is very encouraging. The government wants to push ahead with the mega projects that will boost not only the country’s gross domestic product (GDP) but also the tourism sector. It will create massive opportunities for all the players in the leisure attractions business and we could count on an exciting future for the industry in the MENA region.”

According to Saudi Arabia’s General Investment Authority (SAGIA), the country wants to increase investment in recreational facilities to 6 per cent from the current 2.9 percent per annum – more than double the current level, as part of Saudi Vision 2030.

 “In 2017, the Saudi Arabian tourism sector attracted investment of USD 28.6B, which was six times the world average in tourism capital investments,” according to a report by SAGIA. “Investments are expected to rise 5.5 per cent per annum over the next ten years to USD 54B per annum.”

Despite the current situation with regards to Covid-19, Saudi Arabia is pushing ahead with construction of some of these massive projects. A number of construction contracts have recently been awarded following the partial re-opening of the economy after the lockdown.

Red Sea Development Company has recently awarded construction contracts worth US$1 billion while Neom has awarded Bechtel and AECOM programme management contracts.

Rosa Tahmaseb, secretary general of Menalac, said: “The leisure attractions industry in the MENA region is upbeat with the new opportunities that are arising in Saudi Arabia. We see massive opportunities for our industry being created by more than a US$1 trillion investment in the Saudi Economy between now and 2030.

“I urge the leisure industry stakeholders, both our suppliers and operators to explore these opportunities and ascertain how they can take a leading role in helping Saudi Arabia develop its leisure facilities in the coming decade.

“Despite the short-term setback created by the Covid-19 pandemic, the long-term prospects for our industry remain bright. One example of this can be seen in the dynamic projects planned for Saudi Arabia.”

Tourism and entertainment are an essential part of the Saudi Vision 2030 which is aimed at diversifying the Saudi economy by reducing its dependence on oil. The Kingdom intends to develop versatile tourism destinations, which include several coastal sites, marvellous islands and distinguished heritage areas, all of which will require a high level of expertise, support and the most innovative attractions, technology and experiences to ensure the Kingdom becomes one of the top tourist and entertainment destinations in the Middle East within the next few years.

Source: https://www.hospitalitynewsmag.com/en/event/usd-810b-worth-of-projects-to-help-saudi-leisure-tourism-sector-grow-to-new-heights-in-the-next-10-years/

FIVE Zurich Dubai-based FIVE Hotels & Resorts to make its European debut in Zurich, Switzerland

Luxury lifestyle hotel group FIVE Hotels & Resorts is preparing to fly from the nest and open its first international hotel, in Zurich, Switzerland.

Born in Dubai, FIVE started operations in 2017 with its partying-meets-luxury resort on Palm Jumeirah. FIVE Jumeirah Village followed, providing the same level of service. Together, the two hotels feature 1,198 keys and upwards of 20 F&B venues, as well as a full calendar of events and celebrity appearances.

Looking at the success of the two hotels, FIVE’s management saw an opportunity to expand into Europe. In a statement the group said its Dubai hotels have amassed more than 288,000 room nights from European travellers alone.

Formerly known as Atlantis By Giardino, Zurich, the hotel shut its doors earlier this year due to soaring expenses and a bleak economic outlook. Fast-forward to summer 2021 and the striking hotel will be revived by the Dubai-based group.

“It is a matter of pride to infuse the entrepreneurial spirit of Dubai’s hospitality scene with Switzerland’s longstanding tradition in luxury hospitality. This dream has only been realised due to the pioneering vision and tireless execution of HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, who laid the foundation and has continued to develop one of the world’s most diverse and pioneering economies,” said Kabir Mulchandani, chairman of FIVE Holdings.

To meet the additional workload of adding a third property, FIVE will employ a further 260 employees over the course of the opening, reaching 1,260 employees once the hotel opens.

“It fills me with joy to open this new chapter alongside all of our colleagues who have shown restless commitment and passion in these past months, and to challenge each other’s creativity with this new exciting project; as after all, if it’s not with fun we shouldn’t do it at all”, added Mulchandan.

Source: https://www.hospitalitynet.org/announcement/41005075/five-zurich.html

Airbnb Escalates House Party Crackdown a Week After Filing for an IPO

Dennis Schaal, Aug 24, 2020 6:00 pm

Airbnb looks to be cleaning up some overhangs before its anticipated initial public offering, including being fairly aggressive about promoting its crackdown on wayward house parties in its rentals. In case investors ask about the issue, Airbnb has an answer.— Dennis

In the run-up to — and in the five days since — filing its paperwork to become a public company, Airbnb has publicized its lack of tolerance for house parties and events in its rentals.

In the latest twist, the company announced Monday that it suspended or removed more than 50 listings in Los Angeles County, California, that were the subject of complaints or allegedly violated Airbnb’s policies on house parties or events. The company conducted a similar blitz in Arizona last month.

Clearly no would-be public company answering to shareholders, nor even a private one, would want a repetition of the Halloween 2019 house party shooting in one of its rentals in the Hollywood Hills area of California that saw five people die.

It’s certain that regulators in various jurisdictions focus on any instances of Airbnb being less than a good neighbor so the company would like to clear up as many of these community flashpoint and regulatory headaches as possible while investors consider getting in on the potential stock market action.

Since the October calamity, Airbnb has taken a series of steps to address the issue, including implementing a global ban on house parties and events last week. Under current rules, large houses can have a 16-guest maximum, and guests under 25 can’t rent locally unless they have at least three positive reviews.

Although Airbnb has banned events in its rentals, it is mulling creating an “exception process for specialty and traditional hospitality venues (i.e. boutique hotels),” the company stated. It may also take legal action against guests who violate Airbnb’s house party rules.

In the short-term rental arena, rowdy house parties are certainly not unique to Airbnb, but an argument can be made that it has a more acute problem than many peers because its guest demographic may skew younger.

Amy Hinote, the founder of VRM Intel, a news site for vacation rental managers, said that in addition to its younger clientele, Airbnb is prone to the house party problem because many hosts, and Airbnb’s own team, have “very little experience.”

“So every time they come up against an issue, they treat it like it is brand new,” Hinote said.

Property management companies, Hinote claimed, won’t rent to guests younger than 25, and they collect information about every rental guest during potentially problematic periods such as Spring Break or festivals.

Hinote said property managers informed Airbnb year ago that it needed to create website filters to avoid renting to people under 25. “If Airbnb had truly listened to their reasoning, it might have understood that house parties can be a major problem and strategies are not in place to deal with them,” she said.

VRBO HAS A DIFFERENT GUEST DEMOGRAPHIC

Expedia Group’s Vrbo stated that “the overwhelming majority of Vrbo travelers are families taking a vacation together,” so the implication is that house parties are not as acute an issue as for Airbnb.

Vrbo bans guests who conduct unauthorized house parties and hosts or managers who look the other way. It also bans same-day bookings, and provides an enrollment option for NoiseAware, which has noise detectors and updates owners or managers when decibel levels exceed permissible limits.

BOOKING.COM AND VRBO ARE QUIETER

Two already public companies, Expedia Group’s Vrbo and Booking Holdings’ Booking.com, haven’t made recent announcements about house party crackdowns.

When queried about the issue, Booking Holdings spokesperson Leslie Cafferty said, “Safety is always a priority and we provide support for partners to make it easier to set accommodation guidelines for guests, from limiting occupancy to align with local gathering mandates to setting house rules, including selecting the policy that does not allow parties.”

Source: https://skift.com/2020/08/24/airbnb-escalates-house-party-crackdown-a-week-after-filing-for-an-ipo/

All U.S. Hotel Sectors Saw a Profit in July — Yes, Really

Hoteliers shouldn’t get used to good news. U.S. full-service hotels may have seen a very slight average profit per room in July, but the peak summer travel season is fading — and the pandemic still isn’t under control.— Cameron Sperance

The U.S. hotel industry still faces a long road to a full recovery, but glimmers of profitability are finally emerging across all hotel chain segments following the coronavirus crisis that temporarily closed many hotels around the world.

U.S. gross operating profit per available room in July was positive for the first time since February, according to STR. While the economy sector of the hotel industry has generally performed best during the pandemic due to lower staffing and operating costs, even the luxury sector was in the black in July.

The encouraging news comes days after STR reported the U.S. hotel industry cleared the 50 percent occupancy mark for the first time since mid-March.

“It’s still lower than a typical month, but it’s a huge improvement from seeing negative profitability across these classes over the last 3.5 months,” said Raquel Ortiz, assistant director of financial performance at STR. “That in itself is showing a vast improvement.”

Lower-scale segments are still performing better than upscale and luxury hotel sectors. U.S. limited-service hotels reported a $17 gross operating profit per room in July while full-service hotels only saw a $3 profit.

But even a meager profit is a significant improvement over the $25 loss per room in May, the worst month for full-service hotel profitability since the pandemic hit the U.S. significantly in March.

The upscale and luxury sectors have generally performed poorly during the downturn in travel due to these market segments’ reliance on business transient and convention-related travel, which have both evaporated due to pandemic-related corporate travel restrictions.

Group business travel drives nearly a third of room revenue at higher-end U.S. hotels, according to McKinsey & Co. Upscale properties are generally expected to be the last in the hotel industry to recover from the pandemic’s impact on travel.

“Group business drives hotel profitability as a source of food and beverage revenue and high occupancy nights, and because it typically books further in advance, it will inform everything from marketing strategy to revenue management,” Nathan Seitzman, a partner in McKinsey & Co.’s travel practice, told Skift in June. “So even when business and leisure transient travel fully recover, a lagging group recovery could have a disproportionate impact on hotel profitability.”

The small profitability in the full-service U.S. hotel sector doesn’t mean group business travel is flickering back to life, Ortiz added. Instead, it is more a result of room rate compression between the luxury and economy sectors encouraging some travelers to upgrade from their typical accommodations this summer.

Luxury hotels typically command a $150 to $200 per night premium over economy hotels. But the premium has narrowed to as low as $100 this summer, Ortiz said.

The recovery has generally arrived quicker to resort markets and smaller, drive-to destinations travelers favor while trying to adhere to social distancing guidelines. But there was positive momentum in July for the top 25 U.S. markets, as six of the regions were profitable compared to four in June.

The Tampa/St. Petersburg, Florida; Anaheim, California; Dallas, Philadelphia, Atlanta, and Denver hotel markets were all profitable for the month of July.

Many of these markets are in Sun Belt regions popular with leisure travelers, but urban markets like Philadelphia joining the list last month could be a result of more drive-to attractions reopening and appealing to weekend travelers.

While she expects further improvements in the month of August, Ortiz noted the fall is still largely uncertain territory regarding how long the performance momentum can continue.

“I do think when August numbers come out, we’ll see more incremental improvement,” she added. “But obviously the fall and winter will be an interesting story to see where that goes.”

Coronavirus: Hotels and Airbnb plan ‘fundamental shift’ after COVID-19 lockdowns

By Lauren Chadwick

last updated: 08/05/2020

As lockdown restrictions are eased in several European countries, many in the travel industry hope that with higher cleaning standards and social distancing, business can continue in a new form.

Nicolas Vigier, whose agency manages 60 Airbnb apartments, says he’s slowly seeing demands come in for summer rentals in the south of France.

“Before the crisis, our clients were 90 to 95 per cent foreigners. We had very few French people booking our apartments,” Vigier said.

But now his demand is entirely from France.

Domestic Airbnb reservations in the Netherlands and Denmark are at 80 per cent and 90 per cent respectively of what they were in April 2019, the company said.

Vigier said in France they cannot confirm reservations since people are not yet allowed to travel further than 100 kilometres from their homes.

But the demand is a glimmer of hope for an industry that’s been one of the hardest hit due to the pandemic.

Source: The Conversation (2020)
theconversation.com

‘Severe and sudden impact’

“Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019,” said Brian Chesky, Airbnb’s chief executive, as he announced staffing cuts at the company this past week.

For many, the change to business was abrupt. It wasn’t until the French government announced the lockdown measures mid-March that Vigier saw a significant drop in demand for Airbnb apartments, he said.

Hotel data benchmarking firm STR estimates that hotels that are still open globally are at less than 30% occupancy. In many European countries, the few hotels that are still open are only at 10 per cent occupancy.

Marriott hotel CEO Arne Sorenson said in a sobering video message in March that the coronavirus was “nothing like we’ve ever seen before.”

“For a company that’s 92 years old, that’s borne witness to the Great Depression, World War II, and many other economic and global crises, that’s saying something,” he added.

“COVID-19 is having a more severe and sudden impact on our business than 9/11 and the 2009 financial crisis combined.”

Marriott saw a 90 per cent decline in business in China after the outbreak started, the CEO said in March.

Restoring customer trust in a global crisis

Airbnb has announced a new cleaning protocol for hosts that will launch in May that includes a learning and certification programme.

The protocol will also help to space out reservations in line with the US Centres for Disease Control and Prevention guidelines to have 24 hours between people entering a room.

“Hosts will have access to expert-backed cleaning educational materials and will be supported to show that they take cleanliness and prevention seriously,” Airbnb said in a statement.

These new guidelines will be most “drastic” change to their daily work, said Vigier. It means they will have to have three days between reservations.

Hotels are instituting similarly stringent cleaning policies.

A spokesperson for Marriott said the hotel was adding to its cleaning protocols including “requiring that public space and guest room surfaces are thoroughly treated with hospital-grade disinfectants.”

The company is also testing “electrostatic sprayers” to disinfect entire guest areas.

“The concern seems to be around rebuilding consumer confidence and trust,” said Mark Ashton at the University of Surrey’s School of Hospitality and Tourism Management.

It will depend on “enhanced cleaning standards” and a “reduction of touch points” such as tablets or remote controls.

Whether someone picks a hotel or Airbnb, “depends on trust with the consumer as to whether they perceive that a hotel chain or independent hotel as perhaps going to be more reliable at delivering a higher level of cleanliness and sanitation,” said Ashton.

A potential recovery?

A spokesperson for Airbnb France said that there had been an increase in people on the website investigating spring and summer holidays close to home.

“Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable,” Airbnb CEO Chesky wrote in a note to employees.

Meanwhile, Marriott International said they were slowly seeing an increase in occupancy rates in China, including during an April holiday, where some hotels reached 60% occupancy.

But it will be a long time before things go back to normal.

“It will take a period of time for things to bounce back,” said Ashton. But there’s “a potential that hotels will consider increased automation and a move to digital” which might “speed up the adoption of those types of technology”.

It’s an area where Airbnb already has an advantage due to the ability to check in with an application and be in contact with a host via messaging instead of in person.

Vigier said they used to have someone greet every guest who stayed in an apartment, but it will be an easy change to allow guests to pick up keys in a box or at their agency.

In a crowded hotel, it could be more difficult.

“Do we have robots doing certain things, maybe taking bags, room service, sanitising areas?” asked Ashton.

He expects that digital changes hotels were expecting to implement anyway will happen more quickly.

“There’s going to be some fairly fundamental shifts,” Ashton said.

Source: https://www.euronews.com/2020/05/08/coronavirus-hotels-and-airbnb-plan-fundamental-shift-after-covid-19-lockdowns